Applied Materials
Santa Clara, California, United States
Industry: Technology/Electronics
Region: US 🇺🇸
Year Founded: 1967
IPO Date: 09-07-1972
Market Cap: $124.65 billion
Number of Employees: Approx. 25,000
Revenue: $19.45 billion (2020)
Net Income: $3.30 billion (2020)
Applied Materials, Inc.
Applied Materials IPO
Applied Materials went public on September 29, 1972. Since its initial public offering (IPO), the company has become a leading global supplier of manufacturing solutions for the semiconductor, display, and related industries.
Throughout its history, Applied Materials has consistently demonstrated innovation and adaptability, evolving alongside advancements in technology and industry demands.
Applied Materials IPO Prospectus
A prospectus is a formal document required by and filed with the Securities and Exchange Commission (SEC) that provides details about an investment offering to the public. You can find Applied Materials’ Prospectus here.
Company Overview & History
Applied Materials is a renowned semiconductor equipment and services provider, headquartered in Santa Clara, California.
The company was founded in 1967 by Michael A. McNeilly and others, initially focusing on developing equipment for semiconductor device manufacturers.
Over the years, Applied Materials has expanded its portfolio to include solutions for other industries, such as flat panel displays, solar photovoltaic (PV) cells, and flexible electronics.
As a leader in its field, Applied Materials offers a comprehensive range of products, services, and software solutions that enable its customers to manufacture advanced semiconductor chips and devices.
The company’s technologies and expertise are crucial in driving innovation and supporting the rapid development of cutting-edge electronics, including smartphones, artificial intelligence systems, and Internet of Things (IoT) devices.
Financial Performance
| Year | Revenue($B) | Net Income($B) | EBITDA($B) | Operational Cash Flow($B) |
|---|---|---|---|---|
| 2021 | 22.8 | 5.9 | 6.7 | 6.5 |
| 2020 | 17.2 | 3.6 | 4.3 | 4.1 |
| 2019 | 14.6 | 2.7 | 3.2 | 3.0 |
| 2018 | 17.3 | 3.3 | 4.0 | 3.8 |
| 2017 | 14.5 | 3.4 | 3.9 | 3.7 |
| 2016 | 10.8 | 1.7 | 2.2 | 2.0 |
| 2015 | 9.7 | 1.5 | 2.0 | 1.8 |
| 2014 | 9.1 | 1.1 | 1.6 | 1.4 |
| 2013 | 8.7 | 1.1 | 1.5 | 1.3 |
| 2012 | 8.7 | 0.9 | 1.3 | 1.1 |
| 2011 | 10.5 | 1.9 | 2.2 | 2.0 |
Business Model
Applied Materials operates primarily as a supplier of advanced semiconductor manufacturing equipment and services.
The company provides its customers with a broad portfolio of solutions, including wafer fabrication systems, deposition systems, etch and clean systems, metrology and inspection tools, and other specialized equipment.
Applied Materials also offers a range of software and services to optimize manufacturing processes and improve yield rates.
Through a combination of research and development, strategic partnerships, and customer collaboration, Applied Materials aims to deliver industry-leading technologies that enable its customers to enhance the performance, power efficiency, and cost-effectiveness of their semiconductor products.
The company’s business model revolves around providing comprehensive solutions that address the complex challenges of semiconductor manufacturing and help customers stay competitive in the ever-evolving global marketplace.
Market Cap Over the Years
| Year | Market Cap($B) |
|---|---|
| 2022 | 126.5 |
| 2021 | 118.6 |
| 2020 | 61.2 |
| 2019 | 52.7 |
| 2018 | 40.4 |
| 2017 | 54.9 |
| 2016 | 31.3 |
| 2015 | 22.8 |
| 2014 | 29.1 |
| 2013 | 17.2 |
| 2012 | 15.3 |
| 2011 | 16.2 |
| 2010 | 20.3 |
| 2009 | 14.6 |
| 2008 | 10.2 |
| 2007 | 20.1 |
| 2006 | 17.8 |
| 2005 | 18.6 |
| 2004 | 22.5 |
| 2003 | 16.2 |
| 2002 | 10.3 |
| 2001 | 9.2 |
| 2000 | 21.1 |
| 1999 | 31.8 |
| 1998 | 14.9 |
| 1997 | 9.6 |
| 1996 | 6.7 |
| 1995 | 5.1 |
| 1994 | 4.8 |
Risk Factors
Applied Materials, despite its considerable achievements, operates in a fiercely competitive and ever-changing industry that carries inherent risks.
Market fluctuations pose a significant risk as the semiconductor industry is subject to cyclical trends.
Applied Materials’ financial performance is susceptible to changes in the demand for semiconductor chips and related technologies. Consequently, the company’s operations could be affected.
Technological advancements also present a challenge.
The rapid pace of innovation can quickly render existing products or technologies obsolete.
To remain at the forefront of the industry, Applied Materials must continuously invest in research and development.
Global economic conditions further impact the company.
Macroeconomic factors, such as recessions, geopolitical tensions, and trade disputes, can significantly influence customer spending and demand for semiconductor equipment, thereby affecting Applied Materials’ financial performance.
Supply chain disruptions pose another risk. Any disruptions, including material shortages, trade restrictions, or natural disasters, can hinder the company’s ability to manufacture and deliver its products on time.
In addition, intellectual property and legal matters are prevalent concerns in Applied Materials’ competitive landscape.
The company faces the constant threat of intellectual property disputes and adverse legal rulings, which could have a substantial impact on its operations and profitability.
It is crucial to consider these risk factors alongside other pertinent information when assessing the company.
This summary provides a brief overview of some key risks Applied Materials faces but is not an exhaustive list.
Market Opportunity
The semiconductor industry is experiencing a period of unprecedented growth, driven by technological advancements, increasing demand for connected devices, and emerging applications such as artificial intelligence, autonomous vehicles, and 5G networks.
Applied Materials is well-positioned to capitalize on this market opportunity due to its extensive product portfolio, global presence, and strong customer relationships.
As the demand for smaller, faster, and more power-efficient chips continues to rise, semiconductor manufacturers require advanced equipment and technologies to meet these evolving requirements.
Applied Materials’ solutions enable customers to achieve higher yields, improve performance, and reduce costs, ensuring they can keep pace with the industry’s rapid innovation cycles.
Moreover, the company is strategically positioned to benefit from the growing adoption of emerging technologies, including Internet of Things (IoT) devices, augmented reality (AR) and virtual reality (VR) applications, and electric vehicles.
Applied Materials’ commitment to research and development, coupled with its deep understanding of industry trends, enables the company to anticipate market needs and develop tailored solutions that address the evolving demands of its customers.
Competitors
- Lam Research Corporation
- Tokyo Electron Limited
- KLA Corporation
- ASML Holding N.V.
- Advantest Corporation
- Screen Holdings Co., Ltd.
- Hitachi High-Technologies Corporation
- Nikon Corporation
Key/Fun Company Facts
- Applied Materials has a rich history of innovation, having been awarded more than 14,000 patents globally.
- The company’s technologies have been instrumental in enabling numerous breakthroughs, including the development of the world’s first transistor and the fabrication of the first solar cell to power a satellite.
- Applied Materials has a strong commitment to sustainability, focusing on reducing energy consumption and waste generation throughout its operations.
- The company actively engages in corporate social responsibility initiatives, supporting education, community development, and environmental conservation programs.
- Applied Materials operates research and development centers around the world, collaborating with industry partners and academic institutions to drive technological advancements.